Business & Practice

Chelsea Grayson: From Law Clerk to American Apparel CEO

March 17, 2017, 8:28 PM

Chelsea Grayson

Chief Executive Officer of American Apparel

[Image “chelsea-grayson-headshot” (src=https://bol.bna.com/wp-content/uploads/2016/10/chelsea-grayson-headshot.jpg)]

Chelsea Grayson, chief executive officer of American Apparel, originally joined the company in 2014 as general counsel and rose to the top roughly two years later. She previously spent her entire professional career focusing on mergers and acquisitions at Jones Day and Loeb & Loeb. In February, a Canadian manufacturer closed its purchase of the company, which Grayson oversaw.


Alexander Hamilton High School, Los Angeles, California, graduated 1989

[caption id="attachment_45271" align="aligncenter” width="340"][Image “Chelsea Grayson in her high school graduation portrait.” (src=https://bol.bna.com/wp-content/uploads/2017/03/High-School-Grad-Portrait.jpg)]Grayson in her high school graduation portrait.[/caption]

Grayson enrolled in her high school’s humanities magnet program, which offered courses in the classics, science, English literature, and others that taught empathy toward people. Even in high school Grayson said she wanted to be a chief executive officer of a company. She remembers writing in her yearbook that when she grew up, she’d be sitting in the corner office in a high rise building in charge of a company.

“I have very specific ideas about things,” Grayson said. “I see the world in a particular way and I like to impart that and it’s hard to do as effectively when you’re not running it.”

University of California, Los Angeles, graduated 1993

In college, Grayson majored in English literature, which she said deepened her critical thinking as well as reading and writing skills, and minored in business economics. She credits both areas of study for her career success.

[caption id="attachment_45276" align="aligncenter” width="640"][Image “Chelsea Grayson graduated from UCLA with a major in English literature and a minor in business economics.” (src=https://bol.bna.com/wp-content/uploads/2017/03/College-Graduation-640x360.jpg)]Chelsea Grayson graduated from UCLA.[/caption]

“You have to stand up, you need to think before you speak and you need to always have your ears open and actively listen to what smart people are saying around you,” she said.

Loyola Law School, Los Angeles, Order of the Coif, graduated 1998

Grayson said that taking civil procedure taught her how to think like a lawyer. She said she spent the entire semester reading one case over and over, arguing it from every angle imaginable.

“Your brain flips around like a fish in the air and your brain chemical starts to change,” Grayson said. “You will never think the same way again after you go through law school. You can’t. You just cant.”

Work experience

Horvitz & Levy LLP, law clerk 1993-1995

Prior to attending law school, Grayson spent two years clerking for Holly R. Paul, an attorney at Horvitz & Levy, a firm specializing in appellate litigation. Paul was blind and needed Grayson to research, write, help formulate documents and assist with a book she was working on.

“It does make you appreciate that if you’re able-bodied that you can get through anything, and you can get through anything if you’re disabled,” Grayson said.

By the time the clerkship was over, Grayson understood binding precedent, case citations and how lawyers cull through facts and put arguments together.

Law clerk, U.S. Bankruptcy Judge Samuel L. Bufford, 1998-1999

Grayson’s judge oversaw the bankruptcies of Rampage Clothing and the Italian restaurant chain Louise’s Trattoria during her time. She learned about bankruptcies but also about decision-making and leadership. Grayson remembers Bufford evaluated what he read in case law and sought counsel from other judges. He didn’t waver from reasoned determinations, she said.

“You have to be confident in the decisions that you’ve made because if you’re not, people can sense it,” Grayson said. “People look to leaders to make the right decision and to stand by them.”

Jones Day, Los Angeles, California, 1999-2008

Grayson arrived at Jones Day with her heart set on litigating, but the firm required all associates to spend their first year rotating through several practice areas.

In the end of the dot-com boom, Grayson recalls several clients with startups asked her to work on their deals. She wanted to focus on litigation, but Bertram Zweig, then a partner in the firm’s Los Angeles office, encouraged her to work with him on the deals. To her surprise, she loved it, and went on to devote her practice to mergers and acquisitions.

“You have to love what you’re doing because the law is a jealous mistress,” Grayson said. “And if you don’t love it, you’re not going to be happy.”

[caption id="attachment_45291" align="aligncenter” width="510"][Image “Chelsea Grayson at a Jones Day alumni event with retired partner, Bertram R. Zweig, left, who opened the firm’s Los Angeles office, former U.S. Congresswoman Yvonne Brathwaite Burke, partner Sarah Heck Griffin and Jim Childs, another retired partner.” (src=https://bol.bna.com/wp-content/uploads/2017/03/Yvonne-Brathwaite-Burke_Jones-Day-pic.jpg)]Chelsea Grayson at a Jones Day alumni event with retired partner, Bertram R. Zweig, left, who opened the firm’s Los Angeles office, former U.S. Congresswoman Yvonne Brathwaite Burke, partner Sarah Heck Griffin and Jim Childs, another retired partner.[/caption]

Jones Day, Partner 2008-2012

To make partner, Grayson said she had to impress Lyle Ganske, a partner in charge of mergers and acquisitions who ran the firm’s Cleveland office at the time.

He barely knew Grayson, so she called and asked to work with him. They got to know each other and he became one of her mentors and advocates for partner. When it came to making partner, his advice was to become an asset to the firm whom her bosses would rather promote than lose.

“I spent the rest of my associateship trying to make myself indispensable,” Grayson said.

Loeb & Loeb LLP, partner, 2012-2014

Grayson said she left Jones Day to try her hand at mergers and acquisitions in music and entertainment law — a local industry in Los Angeles — but it just wasn’t for her, she said.

[caption id="attachment_45306" align="aligncenter” width="407"][Image “With Hillary Clinton at a 2014 Public Counsel event. Grayson worked at Public Counsel the summer between my first and second year of law school, in its homelessness prevention law section. " (src=https://bol.bna.com/wp-content/uploads/2017/03/Clinton-Picture.jpg)]With Hillary Clinton at a 2014 Public Counsel event. Grayson worked in Public Counsel’s homelessness prevention law section the summer between her first and second year of law school.[/caption]

Colleen Brown, who eventually chaired American Apparel’s board, belonged to the company’s nominating and corporate committee, and she called Grayson when the company had an opening for a general counsel. Grayson said the idea of working for a single client appealed to her.

Several months before Grayson started, the board suspended founder and former CEO Dov Charney, pending an investigation into sexual harassment and misconduct allegations.

“I thought about the idea of saving a brand and also coming in and saving the culture of the company,” Grayson said of her decision to take the job.

American Apparel, general counsel, 2014

The board terminated Charney shortly after her arrival and replaced him with Paula Schneider.

American Apparel, general counsel and chief administrative officer, 2014-2016

Toward the end of her first year, Grayson shepherded the company through a Chapter 11 bankruptcy filing and engineered a debt for stock swap that converted American Apparel from a public company to one owned by hedge funds. She added chief administrative officer to her title, putting her in charge of the human resources department.

During all of the turmoil, Grayson, a single mother of two, says she was working from “dark to dark.” Her parents stepped in to help her take care of her teenage children — from infancy, they have always known Grayson as a mother who works.

American Apparel, chief executive officer, 2016 - present

In September 2016, Grayson took over as chief executive officer from Schneider.

[caption id="attachment_45311" align="aligncenter” width="606"][Image “Grayson shakes hands with one of the workers inside an American Apparel factory.” (src=https://bol.bna.com/wp-content/uploads/2017/03/Factory-Picture-3-Handshake-640x360.jpg)]Grayson greets a worker inside an American Apparel factory.[/caption]

Two months two later, in December, the company again filed for Chapter 11 bankruptcy protection. This time it sold itself at auction to Canada-based Gildan Activewear Inc., which purchased American Apparel, its intellectual property rights and manufacturing equipment for roughly $88 million. The sale closed in early February.

“We did it, mission accomplished,” Grayson said. “I feel great about it. I did what the board asked me to do and I feel great about the buyer.”

Grayson offers the following career advice:

“You have to treat your career as a public company,” Grayson said. “And you’re the CEO and chairman and you owe a fiduciary duty to the chairman. And that’s you.”

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